Direct Mail Advertising Services

SIC 7331

Companies in this industry

Industry report:

This category includes establishments primarily engaged in creating, producing, and mailing direct mail promotional pieces for clients. This industry also encompasses establishments primarily employed in compiling and selling mailing lists. Establishments primarily engaged in reproducing direct mail copy on order but performing none of the other direct mail advertising services are classified in manufacturing, industry group 275 if they print the copy and in SIC 7334: Photocopying and Duplicating Services if they duplicate the copy by photocopying or similar reproduction methods.

Industry Snapshot

Despite the fact that a majority of consumers claim they receive too much unwanted, unsolicited mail, commonly known as "junk mail," the direct mail advertising industry continued to grow in the early 2010s. Advertisers sought to replace mass media marketing with more focused and targeted marketing activities, which served to increase response rates and reduce unproductive mail. As a result, new opportunities were opening up for database marketers, companies that gather and manage purchase history and personal information.

Concerns about privacy, however, were affecting the industry. More consumers were choosing to remove their names from mailing lists, and new laws regulated the companies' use of personal information. The Internet also exerted an influence over the industry. Although web research complements direct mail efforts by providing new ways to gather information, it also competes with traditional print media for limited advertising dollars. E-commerce is relatively cheap compared to direct mail packages. As with direct mail packages, unsolicited commercial e-mail, a practice known as "spamming," came under fire with consumer advocates, prompting new legislation.

Organization and Structure

Direct mail, like other forms of advertising, plays an important role in the U.S. economy by informing consumers about products and services. By expanding information and distribution channels, advertising is thought to benefit both businesses and customers with a more efficient market. Direct mail is part of the larger direct marketing industry, which also includes specific types of ads that are found in newspapers and magazines, on television and radio, and in telephone marketing.

Like other forms of direct marketing, direct mail ads differ from more traditional general advertising in several ways. The most important distinction, though, is that direct mail advertising typically solicits a direct response from the consumer. General advertising, by contrast, usually seeks to promote a company or product image, inform consumers, or sway public opinion. While direct mail may also attempt some or all of these goals, its primary purpose is to elicit a tangible, measurable reaction.

Besides prompting consumers to take a specific action at a certain time, direct mail also differs from general promotional mail in that each advertisement is usually targeted at specific individuals at their addresses. For this reason, direct mail is often referred to as a form of target marketing. It is also unique because customers respond directly to the company that placed the ad, so the marketer maintains control of the offer throughout its delivery. In contrast, companies that use general advertisements lose control of their message--at the moment an ad enters a distribution channel, consumers are left to decide when, where, and how they will react to the promotion. Direct mail ads are also more likely to stress benefits and features of a product or service. Furthermore, direct mail commonly contains repetitive messages within each ad, whereas general advertisements rely on repetition over time.

Although some advertising firms are engaged solely in providing direct mail services, most companies in the industry are active in all aspects of direct marketing. Moreover, many of the largest companies that offer direct marketing also provide general advertising services. In addition to actually printing, assembling, and mailing promotional pieces, most direct mail firms provide services related to strategic planning, research and development, results tracking and reporting, and database management.

Types of Ads.
Direct mail promotions can be categorized as lead generation, mail order, traffic building, subscription marketing, and fundraising. According to a 1996 Gallup survey, about 89 percent of direct mail advertisers employed lead generation mailers. These ads simply ask recipients to exhibit an interest in the company's offer. For instance, consumers may indicate a desire for more information by returning a response card requesting that the company call or write them with more data. Lead generation ads are often used to build a list of prospects on which the company can focus its future marketing efforts.

Direct mail advertisers also vary the contents of their packages. The traditional format includes an outer envelope, cover letter, product brochure, order form, and sometimes a separate reply envelope. The 1999 study conducted by the Graphic Arts Marketing Information Service (GAMIS) stated that direct marketers were using co-op packs, card decks, ride-alongs, statement stuffers, and self-mailers. In the mid-2000s, models tended to be simpler in design and therefore cheaper to produce. Direct mail advertisers also used more four-color printing and specialty papers to attract potential customers.

Almost all direct mail campaigns fall into one of three market categories: charitable contributions, business ads, or consumer promotions. According to the Gallup survey, companies used many different forms of direct mail to generate leads and sales. The survey reported 86 percent used brochures; 80 percent direct mail letters; 77 percent flyers; 69 percent newsletters; 55 percent postcards; 35 percent catalogs; 25 percent invoice inserts; and 22 percent package inserts. Average mid-sized and large companies' direct mail production was 672,100 pieces each year.

Benefits and Disadvantages.
Organizations seek services from direct mail companies for selectivity and personalization. By carefully selecting the group of consumers that will receive an ad and carefully tailoring the message to that group, a direct mail company can maximize the efficiency of a client's marketing dollars. For this reason, direct mail advertising is the most cost-effective means of advertising for many types of products. In addition to savings related to marketing expenditures, direct mail allows many manufacturers to completely bypass costly retail centers and distribution facilities by delivering products through the mail.

Direct marketing companies also offer the benefit of being able to measure and test the effectiveness of a company's advertising efforts. In fact, direct marketing firms commonly test multiple offers and formats before distributing an ad on a broad scale. This important feature allows an organization to exercise more control over its promotion than is allowed by almost any other type of media. A related advantage is that direct advertising campaigns are more difficult for competitors to monitor and track in comparison to other forms of advertising.

A major disadvantage of direct mail is that it can be very expensive. Direct mail firms typically charge at least 40 cents per piece to print, assemble, and mail even a relatively simple promotion. In addition, clients often pay for creative services, tracking, and strategic planning. In comparison, a full-page advertisement in a trade magazine that reaches 50,000 readers may cost as little as $2,000 to $3,000. Another disadvantage of direct mail is mailbox competition. In The New York Times, Stuart Elliot reported that direct mail climbed to 44 percent of all pieces of mail handled by the post office in 1998, up from 41 percent a decade earlier and 32 percent in 1978.

Consumer perception is another pitfall. Most consumers commonly refer to direct mail as "junk mail," and hold in low regard the more cost-efficient mail-merge packages that combine pieces from a number of different advertisers in one envelope. More than 50 percent of direct mail envelopes end up in the garbage. Moreover, the DMA reported more than 3 million consumers exercised their right to have their names removed from mailing lists. Fewer consumers take the time to clip and redeem coupons the way they once did, making it difficult to track the effectiveness of direct mail campaigns. Despite a general rise in coupon face values, the overall coupon redemption rate fell throughout the 1990s--6 percent in 1993, 9 percent in 1994, 6.5 percent in 1995, and 8.6 percent in 1996.

Mailing Lists.
Mailing lists are the backbone of the direct mail advertising industry. Regardless of how competent and alluring an offer may be, the success of any direct mail promotion is contingent upon the quality of the mailing list used to distribute the piece. To avoid unnecessary expenses, list providers must ensure that address lists are up-to-date, devoid of duplicate names or addresses, and accurate. Mailing lists were commonly sold on labels for anywhere from $7 to $80 per 1,000 for one-time use and about twice that amount for computerized lists that could be used more than once.

Mailing list companies offer the critical advantage of market segmentation by tailoring a list to include only the consumers to which it would be profitable for a company to advertise. For instance, a luxury Japanese car dealership may wish to send an advertisement to all residents in Southern California that earn more than $150,000, have two or more children, own a three-car garage, and currently drive a German car. Using computer database management techniques, list companies in the were able to extract even the most unique niches, such as that just described, from a list of names and information.

In the late twentieth century, list companies offered more than 10,000 different lists, most of which could be tailored to suit specific requirements. The four major types of lists were response, compiled, consumer, and business. Response lists were made up of people that had previously responded to a direct marketing promotion. Because these lists typically provided higher response rates and were more difficult to create, they commonly cost $50 to $80 per thousand. Furthermore, these lists accounted for approximately 60 percent of list industry sales.

Compiled lists were usually created using mass listings from voter registrations, telephone books, licensed driver listings, or other common groups. These lists typically cost $25 to $30 per thousand. Consumer lists were compiled from the general U.S. population and were segmented by various demographic factors. Because these lists often were not proprietary and were sold in huge volume, they usually cost $7 per thousand. In the early 1990s, more than 90 percent of the U.S. population was accessible through more than 6,000 consumer mailing lists. Business lists (13 percent of sales) contained addresses of more than 9 million different enterprises from more than 4,000 lists. Prices in this segment ranged from $35 to $40 per thousand names.

By later in the decade, however, a fundamental shift had occurred regarding the perception of information. For decades, information collected about or from consumers was regarded as the property of the organization that collected it, to be used at that organization's discretion. However, another consensus said the information was the property of consumers, whose consent should be required before information about them was used. Privacy protection laws, which seek to limit the transfer of personal information, especially medical histories and other sensitive data, have been enacted or were under consideration in the United States.

Background and Development

Direct mail advertising was invented by Benjamin Franklin in 1744. He produced a mail order catalog bearing this promise: "Those persons who live remote, by sending their orders and money to said B. Franklin, may depend on the same justice as if present." About 100 years later in Philadelphia, in 1841, the first advertising agency was opened. In 1863 Congress authorized the issuance of a discount stamp for mailers of "printed matter and manuscripts," known as second-class mail. It also issued a third-class stamp for "bulk mailers."

Direct mail advertising in the United States did not become a popular marketing tool, however, until the beginning of the twentieth century. Although not considered an important information and distribution channel in the early days of the industry, several large companies relied heavily on direct mail to promote their businesses. Sears, Roebuck and Co., which marketed heavily through its innovative mail catalogs in the early 1900s, became a famous early example of direct marketing. The Montgomery Ward, Aldens, and Spiegel companies also mailed large numbers of catalogs.

In addition to the large catalog retailers, store-based retailers and industrial advertisers helped expand the industry. In fact, these organizations accounted for the bulk of direct mail sent out by the 1910s. National Cash Register (NCR), for instance, attained legendary results by using mail order to generate leads and to support its sales force. On the cutting edge, NCR mailed tens of thousands of advertisements targeted specifically at niche markets, such as butchers and grocery storeowners. Fundraisers, particularly politicians, also began to realize the benefits of direct advertising.

In response to the growing volume of direct mail advertising, lettershop owners and their customers formed the Direct Mail Advertising Association (subsequently called the Direct Marketing Association or DMA) in 1917. The organization was established to help advance the fledgling industry and grew throughout the 1920s from its initial membership of around 500. The 1920s also saw the emergence of several companies devoted solely to providing direct mail services. For example, DIMAC Direct of St. Louis, Missouri, was founded in 1921 and remained an industry leader in the early 1990s.

Despite immense setbacks during the Great Depression of the 1930s, when DMA membership fell to less than 300, the industry continued to progress. The post-World War II economy spurred the success of direct mail companies, which were using their increasing political clout to influence postal rates. By the late 1950s, the DMA had about 2,500 members, and the direct mail industry represented a multimillion-dollar business. The industry maintained steady growth in the 1960s and 1970s, spawned in part by new catalog retailers like L.L. Bean, Inc., J.C. Penney, and Lillian Vernon. Also boosting industry growth in the 1970s was the advent of postal ZIP codes, which allowed companies to more easily target their mailings.

By 1980, U.S. companies were spending more than $7.6 billion per year on direct mail advertising, and total mail order sales had risen to $72 billion. Furthermore, direct mail accounted for nearly 15 percent of all advertising expenditures. During the next decade, these figures rose substantially for technological and demographic reasons.

One of the greatest reasons for the proliferation of direct mail advertising during the 1980s was the metamorphosis of American lifestyles. More women working outside the home meant that households had more expendable income but less time to spend it. As a result, many consumers adopted direct mail advertisements, such as mail order catalogs, as an alternative to conventional shopping behaviors. Moreover, personal selling through direct marketing became more popular, which put a pinch on traditional retail outlets. The average cost of a business-to-business phone sale, for instance, had grown from $57 in 1971 to $137 in 1979 to more than $250 by 1987. Technological advances also increased the power and decreased cost of computers, allowing direct mail advertising firms to achieve almost exponential efficiency gains. By 1990, computers dominated every step of the direct mail process, from program planning and list development to order fulfillment and response tracking.

The proliferation of new niche products and services boosted industry profits in the 1980s. A dominant market trend since the 1980s was highly specialized offerings that targeted individual needs. Because direct mail provides efficient access to niche market segments, it became the medium of choice for growing numbers of companies. These companies also benefited from toll-free telephone numbers and private mail services, which further increased the efficiency of direct mail advertising efforts.

Other factors that contributed to the growth of the direct mail industry in the 1980s included greatly expanded use of credit cards; the availability of computerized mailing lists; an aging population that shopped at home more often; and a rise in single households. By 1990, expenditures on direct mail topped $23 billion, representing a more than 300 percent rise since 1980. Furthermore, mail order sales grew to more than $200 billion by 1990. Direct mail expenditures also grew to represent nearly 20 percent of all advertising dollars, with a growth rate faster than any other segment of the advertising industry during the 1980s. In addition, industry employment leapt from 44,000 in 1983 to approximately 90,000 by 1990.

The growth of the direct mail advertising industry, which averaged well over 10 percent during much of the 1980s, continued in the early 1990s, despite a sluggish economy that reduced overall advertising activity. The industry remained healthy, and billings for direct marketing services rendered by ad agencies surpassed $4 billion. Direct billings increased 15 percent in 1990 and 13 percent in 1991. Furthermore, total expenditures on direct mail increased 4.5 percent in 1992, versus a 2.9 percent increase in 1991 and a 7 percent increase in 1990. In fact, total direct mail expenditures climbed from $11.8 billion in 1983 to more than $25.4 billion by 1992.

By 1993 the direct mail advertising industry had firmly established itself in almost every sector of the economy. Once considered "junk mail" by some large corporations, direct response ads had become an important form of advertising for even the most elite and sophisticated corporations. IBM, General Motors, Nieman Marcus, and similar organizations were using direct response ads to promote their products and services. Small companies also turned increasingly to direct mail to increase sales and to compete with larger companies.

According to a Gallup study in 1996, 77 percent of U.S. companies used direct mail, and marketing executives considered it the most effective technique in reaching their objectives. The survey reported that marketing executives credit direct mail sales with an average of 5 percent of their company's revenue. Compared to other media, however, direct mail continued to trail telephone marketing by volume of sales generated.

By 1997, sales generated by direct mail surpassed an estimated $421 billion per year, according to the DMA. As further evidence of the upward trend, approximately 100 million Americans were making shop-at-home purchases each year in the early 1990s, and 70 percent had used a toll-free number to purchase an item. About 68 percent of all magazine subscriptions were sold through mail order in the early 1990s, accounting for more than $190 million in sales. Also, insurance premiums totaling more than $10 billion per year were earned through mail order. In 1991, the average American spent $425 as a result of mail order advertisements. Furthermore, about 25 percent of all charitable contributions were obtained through mail solicitations, totaling about $50 billion.

In the late 1990s, the direct mail industry was thriving. In 1998, direct mail advertising accounted for four out of every ten pieces of U.S. mail and generated more than $421 million in sales. Although industry experts projected moderate growth, the volume of incoming mail did not affect consumers' response rate. Most direct mail marketers considered a 2 or 3 percent response rate to be successful. Up to 98 percent of the people who receive unsolicited mail reject the offers, most tossing the direct mail unopened. The United States Postal Service (USPS) concluded that consumers were just as likely in the early 2000s to respond to direct mail as they had ten years ago.

What had changed was the sophistication of the direct mail packages. An important shift in marketing occurred in the late 1990s and early 2000s, with marketers moving from mass marketing toward a more information-led, targeted audience. Advertisers and agencies strove to increase the relevance of--and decrease customer annoyance with--direct mail by customizing the pitches they send to customers.

Database companies provide sophisticated information about customers by overlaying generic information, from phone lists and driver records, for example, with specific information about customers' spending patterns and family size. The Internet provides direct marketers with a powerful information-gathering tool. "The consumer technology that makes the Internet possible is also helping direct marketers in their quest for the grail of relevancy by making it easier than ever to compile extensive information about consumers before any mail is sent," stated Stuart Elliot in The New York Times,

Direct-mail techniques also became more sophisticated. A USPS study estimated that more than 20 percent of advertising mail was thrown away unread, partly because it looked unprofessional. To offset this image, the industry developed new printers that added color, personalized addresses with special fonts to look hand-written, and added personal touches like deliberately crossed-out names. Direct-mail envelopes were sometimes designed to look like express mail and next-day delivery packages to imply urgency.

Consumers were not the only targets of direct-mail advertisers. The GAMIS study reported a rising trend of business-to-business direct-mail marketing. In 1998, business-to-business expenditures represented 39 percent of direct mail expenditures according to GAMIS. Consumer direct mail accounted for a 61 percent share in 1998.

Industry Challenges.
Despite strong growth, the direct mail industry was not without its problems in the late twentieth century. Postal rates continued to rise, increasing the costs and reducing the efficiency of direct mail ads. This change led direct mail agencies and their clients to streamline their lists to reduce the size of mailers and customize their pitches. Moreover, as the cost of mailing grew, more companies moved toward telephone marketing. By 1995, the telephone marketing industry had seized 40 percent of the total direct marketing expenditures, surpassing direct mail by 17 percent. However, by 1999, the tide had again changed. In a Pitney Bowes "Mail vs. Telemarketing" survey, U.S. customers stated a preference to mail by a four-to-one margin.

Industry success led to another problem--overcrowded mailboxes. Because direct ads were competing with increasing numbers of other mail promotions for consumer attention, the response rate and profitability of sending out direct mailers was beginning to decline. Like the increase in postal rates, this problem encouraged more precise market segmentation.

Environmental waste, created by approximately 65 billion direct mail pieces sent out every year, also represented a continuing challenge to the direct-mail industry. Each year, direct ads and catalogs consume more than 1 million acres of forest, and, according to a study by Carnegie Mellon University, bulk mail was responsible for 5 percent of all paper pollution in 1996. The study concluded that companies could also find equal response and sales using the Internet. Consumer environmental awareness negatively impacted the public's perception of mail ads. In an effort to reduce waste, the DMA reported that direct mail advertisers began to use more recycled materials.

By 1997, the direct mail industry faced some competition from Internet marketing. Termed "spam" in Internet jargon, bulk e-mail grew in proportion to the number of subscribers. In 1996 the cost to send bulk e-mail was 99 percent less than direct mail. Philadelphia-based Cyber Promotions, Inc. could send an e-mail ad to more than 1 million computer users for as little as $59 in 1996. This controversial practice was far from commonplace in the late 1990s, though, and faced potential government regulation in several states despite the general "hands-off" approach to Internet commerce promoted by the Clinton administration.

By 1999, new synergies were emerging between the direct mail and Internet industries. A report commissioned by Pitney Bowes, Inc., Mailing Systems Division, "The Role of Mail in E-commerce Study," analyzed the relationship between direct mail and the Internet. It concluded that direct mail was considered the most effective tool for getting customers to go to a website to place an order and was nearly as powerful as Internet advertising in encouraging website visits or "hits." Mail could help develop awareness, sales, and customer relationships, which, combined with the reach of the Internet, could create a powerful sales medium. In December 1999, Big iDeals, Inc., a Silicon Valley-based direct marketing services company, launched the Big iDeals Internet Guide, a booklet featuring multiple advertisers in a single publication that targeted women aged 25 to 54 who had an Internet connection. PR Newswire stated that the publication signaled a new trend among marketers toward using traditional direct marketing in conjunction with online marketing.

Furthermore, at the end of the twentieth century, the direct-mail industry experienced strong consumer backlash. The efforts of direct-mail marketers targeting customers and perfecting mailers were viewed by some as intrusive. Privacy advocates successfully lobbied for more consumer protections against information gatherers. According to the Economist. the Federal Trade Commission gave a warning that only 2 percent of websites had a comprehensive privacy policy. A flood of complaints led the DMA to strengthen its privacy policies with stipulations called the Privacy Promise to American Consumers, which took effect July 1, 2000.

Direct mail advertising methods continued to become more sophisticated in the 1990s and 2000s. For instance, more advertisers stressed database marketing, which entailed maintaining computerized information about customers and leads generated from previous ad campaigns. Such databases were used to market new, or "add-on," products and to establish a relationship with the consumer that would lead to a pattern of sales. By 1992, 54 percent of advertisers were using database marketing and 23 percent planned to begin doing so in the near future. Many direct mail agencies offered database management services to their clients.

Direct advertisers also continued to practice greater media integration, which involved running direct mail ads as part of a larger multimedia promotion. Sophisticated campaigns coordinated the image, message, and timing of multiple marketing channels to increase their overall effectiveness. According to Joanna Lowenstein in Folio, one method that might improve direct-mail response was telesurveying in advance of a direct-mail campaign. New technology and international marketing was also expected to play a role in future growth.

According to a survey conducted in 2002 by StoptheJunkMail.com, 87 percent of Americans polled said that they received too much unsolicited mail, and 65 percent of those polled threw away their direct mail without opening it. In contrast, American Demographics reported that nearly three out of every four adults regularly read their direct mail, and 59 percent of those surveyed had opened their direct mail within the last week.

Despite the conflicting study results, there was a perceived public disdain for unsolicited advertising, and yet the industry continued to thrive. Credit card companies, which sent out a record 4 billion solicitation letters in 2002, received a strong response from certain demographic segments of the U.S. population. According to a 2002 survey of 2,000 adults conducted by Vertis, a marketing services company, 48 percent of those polled had obtained their most recent credit card via direct mail solicitation, whereas other sources received much lower percentages, including a friend or relative (7 percent), their bank (7 percent), special event/in-person promotion (4 percent), Internet (3 percent), or telemarketer (3 percent). According to Vertis' study, although only 21 percent of senior Americans read unsolicited advertising, 43 percent of those under the age of 25 read unsolicited mail.

The direct mail advertising industry was affected dramatically in the fall of 2001 in the aftermath of the terrorist attacks of September 11, which were followed by the sporadic spread of anthrax through the U.S. postal system. A survey by the DMA reported that one-third of all Americans began treating their mail with new suspicion. Warnings went out across the nation to avoid handling mail from unknown senders. As a result, mass mailings dropped 7 percent from September 10, 2001, through November 30, 2001, compared to the same period of the previous year, and some companies reported a 50 percent decline in response rates. The DMA advised marketers to use a return address and a logo if possible to clearly identify the origins of the mail arriving in consumers' mailboxes.

As direct mail marketers optimistically predicted, the public's fear of what came into their homes via the U.S Postal Service was relatively short-lived. The industry, however, continued to face other challenges, including rising postal costs and increased competition from Internet-based advertising. In a study released in January 2003, Blue Martini Software, Inc. reported in its annual poll of 6,000 retail executives that for the first time retailers planned to invest more in e-mail advertising than direct mail advertising. Also, direct mail advertisers had to conform to new rules that went into effect in 2003 that guarded against misrepresentation and misleading advertising.

According to the DMA, in 2003 marketers spent approximately $48.6 billion on direct mail, which generated sales of $689.3 billion, compared to $634.4 billion in 2002. These figures represented a decade-long period of sustained growth. Direct mail-generated sales were an estimated $260.2 billion in 1992, $390 billion in 1997, and $421.2 billion in 1999.

Direct mail continued to grow in the mid-2000s despite the challenge presented by e-mail marketing. Driving this growth was significant cost reductions for e-mail marketing and an increase in sponsored and acquisition e-mail campaigns. Marketers allocated approximately 16 percent of their budget to direct mail in 2004 compared to 24 percent in online advertising. Spam and ensuing antispam software, however, continued to be a problem in the field of electronic communication leading some retailers, including The Sharper Image, to increase its direct mailing campaigns with proven success. A 2004 study by comScore Networks found that 54 percent of new visitors to an Internet retail site did so after receiving a print catalog.

Credit card mail solicitations reached record-setting numbers in the first quarter of 2005, with more than 1.4 billion pieces covering the United States, up 13 percent from the previous quarter. In households that receive such solicitations, that represented an average of 5.7 per month for the quarter compared to 5.3 per month the previous year.

Current Conditions

Although the economic recession of the late 2000s took its toll on many industries in the United States, according to a report by IBISWorld, the direct mail industry withstood the hardships well. According to the report, "Direct mail advertisers have not experienced significant losses, despite the economic recession. Some companies have chosen to use these operators during the harsh downturn, since they provide a cheaper, more targeted form of advertising than traditional mainstream media, such as radio and TV."

According to the DMA, for the first time in years, in the third quarter of 2010, marketers reported increases in spending across all tracked direct and digital marketing channels. Said Yoram Wurmser of the DMA, "The U.S. economy's slow rebound is finally having a positive impact for marketers. The fact that we're seeing marketers allocate larger portions of their budgets to customer acquisition efforts, as well as a renewed focus on assertively growing their business proves their heightened economic confidence."

By that time, the term "direct mail" had come to include such types of advertising as email, and the DMA served the industry by tracking data on these methods through its Email Experience Council. The Council reported, for example, that the "open rate" (number of advertising emails that were opened by the receiver) was 22 percent in the second quarter of 2010, up from 18 percent two years earlier. Other figures showed that messages that advertised services had the highest open rates (42.5 percent) and that the average volume per client had increased 10.5 percent as compared to the previous year.

The traditional direct-mail industry continued to face significant challenges in the second decade of the twenty-first century. For example, continued government pressure to raise postal prices threatened to increase marketers' cost of doing business. In September 2010 the Postal Regulatory Commission rejected a proposal for a rate hike that, according to the DMA, would have increased postal rates by nearly ten times the rate of inflation. Another challenge for the industry was environmental concerns about the waste created by the huge volumes of direct mail that was sent through the postal system every day. Organizations such as 41pounds.org reported that the average American received 41 pounds of junk mail a year and was just one of many companies that offered services that promised to eliminate consumers' volume of such mail.

Industry Leaders

One of the industry leaders in the early 2010s was Valpak Direct Marketing Systems, Inc. of Largo, Florida. The firm was selected as the top franchiser in the direct mail advertising category by Entrepreneur in January 2003. By 2010 there were about 200 Valpak franchises in the United States, Canada, Mexico, and Puerto Rico, along with five corporate-owned facilities and a corporate-run website. The company sends over 520 million direct advertising packets every year.

Wunderman, the direct marketing arm of advertising giant WPP, Inc., reported revenues of $378.2 million in 2004. By 2010 the firm had about 120 offices in 50 countries. Valassis Communications Inc. was another industry leader. Valassis specialized in producing newspaper inserts and coupons, with 25 locations in the United States and eight overseas. The firm reported annual sales of $2.2 million in 2009. Harte-Hanks Inc., a former newspaper company, was also a strong player in the direct mail industry, sending out shoppers (advertising circulars sent by mail) to more than 11.5 million Americans a week. Harte-Hanks' revenues were $860 million in 2009.

Other industry leaders included Rapp Collins Worldwide, of New York, with revenues of $360.2 million in 2004, and Digitas (formerly Bronner, Slosberg, and Humphrey) of Boston, which produced $382 million in revenues in 2004.

Workforce

According to the U.S. Department of Labor, Bureau of Labor Statistics, mail machine operators and clerks (other than the postal service) numbered 141,400 in 2009. Although job growth was expected to continue in advertising agencies, an increasing number of direct mail advertising positions were anticipated with product and service companies that moved their direct mail operations in-house. In addition, direct mail advertising occupations were likely to become increasingly blurred with other advertising positions, as the trend toward multimedia and integrated marketing proliferates.

America and the World

Direct mail advertising originated and developed in the United States, and America continued to lead the world in the use of direct advertising in the late 2000s and early 2010s. In fact, while nearly 45 percent of all global advertising dollars were spent in the United States, a much larger proportion of global direct mail dollars were spent domestically. For instance, the average American received about 290 pieces of direct mail per year, far more than citizens in any other country. Canadians, who received the second largest number of mail ads, got only about 130 pieces per year, and much of that was mailed by U.S. companies.

Germans, in contrast, receive about 70 pieces per year, and Britons get about 40 direct mail ads each year. People in Australia only see about 15 mail ads every year. Even in Japan, which has a relatively advanced direct mail industry by world standards and a very high per capita gross national product (GNP), companies only spend about $14 billion per year advertising through the mail. Furthermore, many direct mail agencies in that country lag far behind U.S. firms in automation and information technology.

Besides the fact that other countries lag behind the comparatively advanced U.S. advertising industry, direct mail is popular in the United States for several reasons. For instance, the American lifestyle is more suited to mail advertising than most foreign societies. The U.S. marketplace imposes fewer language barriers than marketers in Western Europe, for example, might encounter. Finally, the lowest postal rates in the industrialized world make the United States a haven for direct mail advertisers. While in 2003 a first-class letter could be mailed for only 37 cents in the United States, Germans and Italians paid the equivalent of about 63 cents per letter. First-class letters in Japan and Norway cost about 50 cents, and most European Community nations charged more than 40 cents per piece.

Many Americans have become jaded by some less-than-honest direct-mail practices. Scandals involving Publishers' Clearinghouse, in which some elderly Americans lost their savings, served to tarnish the industry's image. However, direct mail was considered a new phenomenon in many parts of the world. While many Americans toss direct mailers in the trash unread, recipients in the Czech Republic and Russia, for example, pore over their mailings and pass them along to others. Higher postal rates and language barriers have not dissuaded many U.S. companies from launching direct mail campaigns overseas, and many increased their efforts in the late twentieth century.

Other overriding political and economic factors radically changed the international investment landscape as well as the prospects for successful advertising campaigns. The 1997 and 1998 financial crises that toppled economies from Asia to Russia and Brazil posed challenges to direct-mail marketers, including reduced demand, increased protectionism, and the deterioration of infrastructures, according to William J. McDonald in Direct Marketing.

Research and Technology

Direct mail advertising companies continued to benefit from advances in automation and information technology that increased the value of their services. Advances in computer technology already allowed companies to make mailings more personalized and specific. For example, many catalog producers developed personalized catalogs that were tailored to certain demographic profiles. The same company's catalog, for instance, could be tailored during printing to emphasize different products or offers for a variety of different customer types.

Multimedia technology that integrated video, optical disk storage devices, and personal computers also impacted direct mail advertisers, perhaps negatively. Multimedia could increase the trend toward consumer controlled advertising by allowing consumers more power in choosing which ads and media they internalize. Advances in recycled paper, printing technology, and ink could help the industry move toward reduced waste and lower production costs.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

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Uspto Issues Trademark: Jre Jeunes Restaurateurs
US Fed News Service, Including US State News; January 14, 2018; 700+ words
...the word "JRE"."Goods and Services: Direct mail advertising services in the nature of prospectuses, printed matter...advertising by mail order in the nature of direct mail advertising services; radio advertising; television advertisingOrganization...
Uspto Issues Trademark: Woozy
US Fed News Service, Including US State News; January 14, 2018; 700+ words
...purposes; dissemination of advertising matter; direct mail advertising services; writing of publicity texts; advertising...line advertising on a computer network; direct mail advertising services, namely, advertising by mail order; television...
Uspto Issues Trademark: M Marketing Solutions
US Fed News Service, Including US State News; January 25, 2018; 505 words
...services in the field of search engine marketing; search engine marketing services for sales promotion; direct mail advertising services; brand concept and brand development services for corporate and individual clients; marketing services...
Uspto Issues Trademark: H ' Five
US Fed News Service, Including US State News; January 26, 2018; 432 words
...in between the wording and a yellow curved line on the right of the term "FIVE"."Goods and Services: Direct mail advertising services; advertising services; radio advertising; on-line advertising on a computer network; rental of advertising...
Uspto Issues Trademark: Aaf Spares
US Fed News Service, Including US State News; January 14, 2018; 700+ words
...networks; database management, namely, database management on Internet, extranet and intranet networks; direct mail advertising services; television advertising; advertising via the Internet, extranet and intranet networks; advertising dissemination...

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